Development Deals
2:10 pm
Wed June 11, 2014

City Explains Hartford's Secrecy Around Proposed Stadium

Hartford City Hall.
Credit Heather Brandon / WNPR
Hiring a lawyer to hire a sports consultant shielded the very existence of the consultant from the public.

For the better part of a year and half, Hartford city officials negotiated a plan to move the New Britain Rock Cats to the capital city behind closed doors, saying the deal needed that kind of confidentiality, lest it fall apart. 

Speaking on WNPR's Where We Live, Hartford Development Director Thomas Deller acknowledged that the city hired a lawyer to advise it in the process, and that lawyer hired a sports consultant. One benefit of the decision was it shielded the very existence of sports consultant from the public.

"We've done it that way with other things," Deller said. "It's a way to get things done, procure things, and move things forward. It's a normal practice that we've used a few times. It's a way to keep things moving forward, and get it done in a timely manner."

City bidding rules are clear that all contracts worth over $25,000 have to be sent to bid by the city. The city hasn't said how much the consultant was paid.  UPDATE: The city now says Brailsford and Dunlavey was paid $69,000.

Deller said the proper procedure was followed. "I think it meets the procurement rules," he said. "We had that discussion before we did it, and I think it does."

State Senator Eric Coleman said that kind of deliberate secrecy alienated some people at the state legislature, including him. He didn't find out about the plan until it was announced publicly.

The city's audit commission said it may look at the finances of the ballpark proposal.

Below, read a transcript of the Where We Live segment including Deller, as well as call-in Hartford City Councilman Larry Deutsch. Listen to the segment below:

"This is daily operating procedure. This is the way we do our job."
Thomas Deller

JOHN DANKOSKY, HOST: Why did we have to keep this process out of public view? Why was it important… for us to not really know that this deal was going down?

THOMAS DELLER: You need to understand that we do development deals every day. We work with developers all the time. There’s a lot of discussion that goes on that happens before anything goes public. We need the ability to do our job, sit down, to vet a project, to understand: Does it make sense? Does it fit into a variety of regulations? What is the background information that may help us understand that this is something that we should consider? [We can] really sit down and look at similar things around the country. This is daily operating procedure. This is the way we do our job. I mean, I have several meetings today with developers talking about things, and until we have a concept of where they're going, and what they're doing, we don't go public with it. 

JEFF COHEN: Procedurally, we know that there was this report by a sports consultant. Normally, if the city wants to hire a consultant, the city hires a consultant. In this configuration, the city hired an attorney to be its counsel as it explored this matter, and then that attorney went ahead and hired the consultant. Why’d do you do it that way? 

DELLER: We've done it that way in the past for other things. It’s a way to get things done, and procure things, and move things forward. It's a normal practice that we have used a few times. It’s just a way to keep things moving forward, and get it done in a timely manner. We require that when we do that, the firm that is doing the hiring force meet the city's requirements: selecting and getting at least three proposals, and getting the analysis to meet all the city procurement rules. It’s a way to keep projects moving, given the demands of our staff at times.

COHEN: This is going to get technical, but does it satisfy the city’s procurement rules if a third party, like a lawyer, is procuring the contract for you? It would seem that if the contract is more than $25,000, the city itself needs to be bidding that out.  

DELLER: Well, I think it meets the procurement rules. I think we had that discussion before we did it, and I think it does.

COHEN: Okay. Let me ask, then, and then I’ll be done, on the confidentiality side. Could you explain a little bit on what you heard from the Rock Cats? We’ve heard the Rock Cats needed this secret. We know that the Rock Cats --  you’ve said that they’d leave the state of Connecticut. Did you come to an analysis that their representation was merited, or warranted? That you actually risked losing the deal if word leaked out?

DELLER: We had a lot of discussion with Josh Solomon and his attorney , who -- I am blocking on his name right now -- as well as the president of the Eastern League, who were very clear that they needed confidentiality, so they would not damage their brand, their name, and that if they couldn't figure out a way to stay in Connecticut, other than New Britain, that they would end up moving. We did a lot of discussion on that; we did a lot of research; we talked a lot.

We have a state that’s sort of -- the west part of the state is controlled by the Mets and the Yankees. The east part is controlled by the Red Sox. There is this very small column, in the center part of the state, where they can be located. There’s probably not many places they can go. Based on our discussions, and based on the checking we did, we believed that that had to be kept confidential, just like a lot of development deals are.

COLIN MCENROE: Mr. Deller, you said just now that the city does deals like this all the time, and that you have meetings today of deals like this. How often does the city put $50 million or more of public money into one of these deals?

DELLER: We don’t often put public money, that scope of money, into public deals.

MCENROE: Have you ever been involved in a deal before in which the city of Hartford has put $50 million or more –

DELLER: The most we’ve put into a deal was $5 million into the Colt facility.

MCENROE: So this isn’t really like deals that you do every day. I mean, it’s nothing like it.

DELLER: Well, when you’re talking about the cut dollar amount, no. But the types of negotiations is really something we have a lot of discussion about with developers. We sit down, and we talk with developers about how we’re investing into what we’re doing, whether it’s some of the housing deals – 3 Constitution Plaza, where the city’s investing about $1 million, or 390 Capital Avenue, the old Hartford [Office] Supply Building, we’re investing a little over $3 million. Those are discussions that go on. We have very confidential discussions with a developer, and then take it to the mayor and to the city council. When we have agreement that there’s a basic sense that we’re going to make this investment and move forward, then we go public with it.

Those things happen. This is different in nature because it’s building a stadium: a city facility, that the city will own. It will be a city asset. The team will be responsible for maintaining it and managing it, but it will be a city asset, just like Bushnell Park is a city asset, just like other facilities that we’ve built – schools are others are city assets. This is a city asset that we’re building, that we’re having someone operate to bring some life to the North End of the city.

MCENROE: Just because these negotiations were held in private, obviously, we’re all playing a lot of catch-up right now. We’re trying to figure out how things happened.  In the Courant today, these emails were released. It’s clear that at one point, you were in meetings with the team and its lawyers about a stadium that would cost $32 million. How did the price of the stadium get doubled? Why is it a $60 million stadium now, when it was $32 [million] at one point in the meetings with these other principals?

DELLER: $32 million was the price for the development of a stadium that had happened about five or six years ago. I don’t remember exactly what stadium it was. What we have done, and in an effort to try to understand it -- $60 million is a little on the high side – we actually went out, and after we analyzed a variety of sites in the city as potential sites, we picked one that we felt was best for the city to achieve things. We had a preliminary analysis done of the cost of constructing this facility, and ancillary costs. The rough number that we had, looking at my notes here, was about $52 million, or $51 million. I’m trying to find the page that has those numbers on it.  

We talked about a few other things that have to be done – road relocation, and things of that nature – and put a rough budget number of $60 million out there. Our goal was to spend only what we have to, nothing extra. But that was the analysis that was done, and that’s how the numbers came together.

MARK PAZNIOKAS: Thom, an element of this has been how real is the threat by the Rock Cats to leave the state. In your discussions with the team, what were the factors they cited for driving them out of New New Britain, where, to the outside eye, it seems to be a decent deal. It’s a much lower rent than they’ll pay in Hartford – it’s about $100,000 a year. Their attendance, by Eastern League standards, is strong. They’re in a relatively modern stadium that was built in 1996. So what’s the problem down there?

DELLER: A couple of points came out. One is the way the lease is established, the city has full liability and responsibility for maintenance and preparing the fields, and everything else. There’s been some issues with that. Two is, as they’re looking at what’s happening in the Eastern League, and how stadiums are being designed and marketed, they’re looking at trying to build their team, to make it a bigger, more attractive sport, to try to bring more people in. So it’s a business deal they’re looking at, and they’re trying to understand, how to get a return on their investment. I think they spent about $16 million buying the team. So they’re looking at options. When they approached us, they were saying that they were trying to analyze what to do, and where to go, and they were interested in talking to us about it. As I said, we talked to the president of the Eastern League and got some understanding from him and felt that they weren’t going to stay in New Britain and we had to do something to keep them in Connecticut.

DANKOSKY: Paz, I just have a question for you. One of the storylines around this entire thing has been that Governor Malloy has essentially distanced himself from this entire deal. A previous governor, Governor Rowland was very big into redeveloping urban areas, as we all know, including Hartford. We heard earlier that Eric Coleman and others in the state legislature maybe don’t know anything about what’s going on here. What do you think the impact is of the city keeping this from folks at the state level?

PAZNIOKAS: Well, political necessity dictated that the governor takes the position that he’s had and I think the governor is relieved to be outside this process to a large degree. When there have been other efforts by governors to move sports franchises, it’s been from outside the state. This, obviously, is a very ticklish situation where a Democratic governor – the last place he wants to be is standing between Hartford and New Britain during a fight over a sports franchise.

DANKOSKY: And I think that’s one of the questions I had for you Tom Deller. Obviously you folks do an awful lot of business with the (state), you’re in constant contact with them around development deals including their very active DECD. I’m wondering if you feel that cutting this deal is going to be worth it, given the fact that with the state government not part of this process, the governor essentially distancing himself from it. It may be very well harder for you to go to the (state) to ask for money for some of the services that you’ve needed to ask for money for in the past or to even get involved in a big development deal like this given the fact that you struck out on your own for this one.

DELLER: I don’t think so. I think that we work with the state on a variety of issues every day. Every week, we meet with people whether it’s DECD, housing, others, we work together and I don’t think that…if a city or town in Connecticut does something on their own without the state, that doesn’t say that the state’s not going to work with them on other deals. Almost every community does something on their own without necessarily involving the state. So why should this impact any future deals that we with?

DANKOSKY: I think just getting back to Colin McEnroe’s point – this is a much bigger deal than a lot of the deals we’re talking about. Paz?

PAZNIOKAS: The governor is threading that very needle. He’s also made it clear that he does not consider this a breach of his relationship with Mayor Segarra.l

DANKOSKY: We have a call coming in here from Larry Deutsch. He’s a Hartford City Councilman. Hello Larry.What’s on your mind?

LARRY DEUTSCH: Well,on our minds is this: as you’ve already said the city council and other city officials were left out of the discussion, which I do think is a mistake. Even recognizing the discussion about confidentiality – on the other hand, transparency has been absent as you’ve already said. But I do think that city council or some of us at least should been discussed because we may have different priorities. First and foremost is jobs for Hartford residents and others and sometimes, some parties may not consider that as important. We’re speaking about claims that many people in the city feel – I speak as minority leader but I think for the majority of Hartford citizens that the assurances of 655 jobs, full time equivalent and so-on, seems patently false unless you surmise all the ancillary stuff. So there’s a lot of assumptions made that many people in the city would object to. Likewise, the financing: that solely Hartford financing it, rather than either a venture capitalist, [unintelligible] perhaps whatever corporation wants naming rights, so I would say that your panel, all of us in conversation will not let it go through unless certain questions are answered. That’s the biggest thing about jobs, duration and quality, and good salaries, and financing which involves other parties than the City of Hartford taxpayers.

DANKOSKY: And I think we’re trying to get answers to some of those questions. Jeff you wanted to jump in?

COHEN: Well, I think what Councilman Deutsch is getting to is the idea that the City Council and the mayor are now at a point of setting priorities. And this is where the discussion is now. Is this the right priority at the right time for the city? It’s a baseball stadium. We know that just weeks ago that the mayor was at the state capitol asking for money to help close his budget. We know that he was looking to sell parking garages, sell city assets to make his annual operating budget work. Now the city is going to go out and has the resources to borrow and pay the debt service on $60 million potentially. The discussion now is, well, is this the priority for now? Some things that are on the capital improvement project list will have to come off the capital improvement project list and that’s now what the discussion is. What’s going to be lost if we do this stadium?

DANKOSKY: Thom Deller, I’ll just give you the last word and ask you to answer that. What happens to all of these other projects and what happens to the fact that the city has had to borrow to just make ends meet recently. How do we reconcile those two things?

DELLER: There are some projects in the capital budget that may be delayed. But we are going through every project and identifying projects that are completed and have spare cash. Projects that are not moving forward for a variety of reasons because we’re no longer going to do it, something was budgeted three or four years ago and decided not to do it, and we have identified a series of dollars – somewhere between $15 and $25 million – that we’re going to sit down with the mayor and the council and discuss and say this is the reason that we’re going to eliminate these, or we don’t think we need them now, or these are spare dollars that have come back to the city because we didn’t need them for the project. So there’s that amount of money. We worked very hard this year in looking at the capital budget and looking at the capital budget moving forward and the things that we need and the budget that was submitted to the council and I believe the council approved it this past week (the capital budget), is very clear on addressing the needs of the city as it becomes to roads and schools and other things. We’re very cognizant of what we can afford to do given what our bond rating has done, what our financial advisers have told us and we have created an internal cap of what we will not exceed in where we are going.

I think that what’s important though is to think about the fact that this is not about what Hartford was, but what Hartford is going to become. We need to stop being negative and understand that we need to discuss these priorities and figure out the best way to move forward and how to achieve it and that is the policy debate that happens between the mayor and the council and it is before the council at this point. We will continue to have these discussions and the follow-up on what Councilman Deutsch said, we are intent on creating as many jobs for the city residents as possible.

DANKOSKY: I know, Colin, you probably want to jump in on this, because we have to end this segment. It’s a policy debate between the mayor and the city council perhaps, but a policy debate that I know you’d probably like to see happen in the public more, Colin.

MCENROE: Now, of course, we want to know what those $15 to $25 million in expenditures that are now fungible are. I really do think the way that this is being discussed becomes a little like “Through the Looking Glass.” I mean, on the one hand, you’re going to the state and asking for money to close a hole in your budget, and now you’re announcing that there is somewhere between $15 to $25 million that you can pull out of the budget, because there is money left over after projects, or there are projects you no longer want to do, or something like that.

DELLER: No, not the budget, Colin. The capital [improvement] budget.

MCENROE: Nonetheless, you can’t cry poor mouth and then suddenly say, well really actually, we have $15-25 million that we could put into play right now just by squeezing some things out of this project and maybe delaying that project. I don’t think that was the song that was being sung at the state capitol.

DELLER: Well there’s a huge difference between how we fund the capital budget and how we fund an operating budget. The capital budget line item is a debt service line item in the budget and that’s a fairly small line item this year and we did squeeze that and we did reduce that. This is talking about dollars that have been allocated…funds that are available that we can only use for capital items and that’s how we’re going to use them.

Heather Brandon, Tucker Ives and Tess Aaronson contributed to this web post.